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Govt examining various aspects of virtual currencies

NEW DELHI: The committee appointed by the government last year to examine issues related to cryptocurrency has submitted its report and is examining pros and cons, including launching of its own cryptocurrency, said a top legal affairs ministry official at an ASSOCHAM event held in New Delhi earlier this week.

Addressing the second Global Summit on P2P Digital Asset System, organised by the Associated Chambers of Commerce and Industry (ASSOCHAM), Anadee Nath Mishra, Additional Secretary, Department of Legal Affairs, Ministry of Law and Justice, said the government is also looking into the allegations that people who had black money had diverted the same to cryptocurrencies in India during the period of demonetisation in 2016.

It was reported that during the period of demonetisation, lakhs of people had used illegal money in bitcoins and that was one of the main factors responsible for the sudden increase in the price of bitcoins. The government is also examining the use of black money, said Mishra.

There has been a phenomenal increase in recent times in the price of virtual currencies (VCs) including bitcoin, in India and globally.

The VCs don't have intrinsic value and are not backed by any kind of assets.

The price of bitcoin and other VCs, therefore, is a matter of mere speculation resulting in spurt and volatility in their prices.

There is real risk of investment bubble of the type in ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard earned money.

Consumers need to be alert and extremely cautious as to avoid getting trapped in such ponzi schemes, said Mishra.

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